performance since the last lock up expired? it's back up to $28 a share. and susan rice drops out of the running for secretary of state. it's friday, december 14th, 2012. and "squawk box" begins right now. i'll give you a -- for a friday in a second. >> good morning and welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. becky quick is out today. our guest host this hour, rebecca patterson and peter. check out today's lineup. it is a biggie. we have an exclusive interview with dallas fed pet jrichard fibber. and the interview of the morning

you do not want to miss. it is a crazy story we've been talking about for the past two weeks. john mcafee will be joining us live on camera at 8:40 a.m. eastern. we're going to get the latest chapter in this mystery that has murder, mayhem and suspension. his life is the movie of the week, if you will, and we will have it live right here at 8:40. please, do not miss that. let's get you caught up on some of the other headlines this morning. house speaker john boehner and president obama met for the second time this week. both parties are trying to avoid the fiscal cliff. the men had a frank discussion and the lines of communication remain open, although no specific details were released. the meeting came after frustration in washington. this was house speaker boehner earlier in the day. >> republicans want to solve this problem by getting the spending line down. the president wants to pretend the spending isn't a problem.

that's why we don't have an agreement. president obama remains hopeful that a deal will get done. he he told a cbs affiliate that he's willing to do a lot more in cuts and spending, i seas, paired up with a little more in revenue. we're going to talk more about this with john harwood in just a few minutes. >> mcafee today. >> today. >> you're doing -- >> i can't even get over it. >> i think he's in florida, right? >> are you going to ask him all those -- you know when you get a guy, you like to needle them with questions they don't want to hear? just don't get him too mad at you, that's all i'm -- because we don't know all the facts yet, right? >> i'm trying to get a movie deal with this guy, a book deal with this guy. it doesn't matter how someone gets fame, you will suck up to them no matter -- this guy is notorious, he's not famous. >> we still have to pick the actor for him. >> i want pachino, in that movie where he played the devil.

he had the gotee. sometimes he has a goatee, anyway. >> he's supposed to be on at 8:40. he's traveled through many countries. >> we could have come up here and been on set with us, right? maybe he can't leave florida. i don't know. we'll see. another big facebook lock upsending today. 156 million shares are eligible for sale for earlier investores and employees. mark zuckerberg is not included in this group. he says he won't sell any more shares until next september. the stock is quietly, i guess, rebounded after stumbling below $20 a share. right now stobs closed at $28.25. >> off 25%, but much better. >> better than ending in something with a teen. and united technologies expects profits to rise next year.

the company says growing demand for its building products, elevator and air-conditioners is growing. he's hopeful the government will read an agreement before january 11th, but he's confident. we're looking for a bit of a rebound. ragged session yesterday, but not a lot going on with the vix. it's down a little, but no one is thinking, is it going down 7.00? just probably down to 70. >> no volatility. there's this preserve disincentive because everybody seems to expect that -- we'll auk about it in a real -- in words we thaerd it was qep.

we just found out it is qep. >> because we had a housing boom that wasn't real. >> if that's the new norm, we're at 3 trillion. a couple years we'll be at 6 trillion. a couple years later we'll be at 12 trillion. are you ready for the next? what's a thousand trillion, do you know? >> no, but we do have two guest hosts on the set that may be better at math. what is a thousand trillion? >> i know. >> quadrillion. >> hopefully we don't have to go above that, do well? >> that's your tax story there. >> all right. let's take a look at the oil boards and see how crude is fairing. i'm surprised that maybe we haven't seen crude go up the. our dollar doesn't necessarily go to zero. you figure if you're doing 8el 5

billion a month that crude would have gone up because 06 worries about the dollar. >> you've got new supply partly thank to fracking. i think there's a reason why oil is where it is today, actually. >> brent at about 100. so wti is its own supply -- >> but it's bigger than the neighbor at this point, right? the dollar is still probably the -- >> yeah. but think about what this global economy has gone through and present is at 100 and wti is still 85. i mean, ten years ago, people would think that's crazy. >> and the ten-year, this has been like watching -- >> paint dry? >> paint grow. >> there, put it together. >> i told you someone wrote in what jamie said the other day, you can't blanket all bankers with the same brush. i love that. that's one of the classics. it's like a walk in the cake. anyway, let's look at the

dollars. mixed metaphors are so much fun. you sound like rick kaufrd, who you never heard of. >> there's there's if tedgue. >> it's an age thing. >> it is and we're working to bridge this gap. >> we are. and so am i. the dollar/euro at 1.3092. gold also interesting that it's still below 1700. but when everyone says why isn't it going up? well, it was at 200 and it went to 1800. is it supposed to go immediately to 3,000? you can still buy a -- well, you couldn't, but i can still get a suit for $1,700, couldn't you? no, i know you can't. you can't get the vest within you can't get all the different pockets, you can't get the lapels on the vest. >> suits start at five or ten

grand, don't they? >> yours do. you have a guy like carlson who -- >> right before the show starts, absolutely. >> who is matt crawly's fellow? >> i know who you're talking about. i don't know. >> because he's weird. all right. so here is the question of the morning. financial times just announced its person of the year. you seem like you know who it is. >> i've cheated. >> don't say. >> barbara walters already named the person of the year. it was petraeus. >> there is omore than one. >> say -- i saw the name. >> the honor going to -- do we have a camera here? >> it's part of the culture. >> person of the year, the honor goes to ecb chief mario draghi for his efforts to deal with the financial crisis.

you know who also could be the person of the year? becky quick. she knew how important that was when he said he was going to do whatever it took to preserve the euro, that statement earlier this year sort of turning things around, at least temporarily. >> you showed a picture of damian hurst. >> no, right here. >> you showed the guy with the zebra and i'm going, draghi has a lot of style. >> no, right here. up here. >> oh, okay. >> the man with the printing press. >> i know who he is. i told you my latest tie that i get from those guys has bernanke with a helicopter and it has draghi, too, and euros and dollars coming out of the hell koepter. because they're on board. let's go across the pond to where they print this paper. kelly evans is standing by in london and may have some views on the man being ownered t today.

i didn't know the newspapers honor people like that. oh, you see, that's the way to hold it. >> yeah. you showed damian hurst. >> i can hold a mean newspaper, andrew. mario draghi is the financial person of the year. this is from the inside, it's not their front cover. but this is their big spread. i thought about your comment about the tie, joe. a couple of years ago, it was ben bernanke who was suddenly on the lips of everyone in the world for coming to the rescue. it's quite clear that this year is the year of mario draghi. i wonder if "time" magazine would not decide to name him person of the year. but the fact that he is in the running tells you quite a lot about the importance of europe this year. earlier today, we were talking about the fact that they had picked trichet on in the past. he doesn't necessarily regret it. he said oppose dollars to some of the other types of running,

they look for someone who is having a positive impact. they did consider angela merkel. that's the answers with regard to the person of the year. let me give you a quick sense of what else has been happening in europe overnight. the big moves, we're coming out of asia. 4.3% of the shanghai composite. it just had its best day in three years. this follows some pmi data that supported the idea of domestic spending. of course, it's been this coiled spring market over the last couple of weeks. after we saw the shanghai fall below the 2,000 level, it's in several big days. the news agency tweeted a picture of chinese stockbrokers grinning this morning to give you a sense of the mood. compare that to the nikkei which was down this morning going into the election these weekend likely to put shinzo abe back in power. he's seen as following up his campaign rhetoric with bold reforms to boost the economy and perhaps get things started on a

stimulus forget and yet we see the nikkei down today. why? because the tankan business survey came out and disappointed. export orders, a sign of weakness there and in china and in some of the pmi figures that we got across europe. so the theme that is emerging, while germany even showed some signs perhaps of strength in its service sector, there's still concern about global growth prospects. for that reason, all the more reason why perhaps it's important for policymakers to be proactive, including mario draghi. back over to you guys. >> thank you for that. who is going to be the squawk perpendicular of the year, joe? >> you mean if we pick one? >> if we pick one. >> we have to pick one that's not obvious. >> like mcafee, maybe. i had an opportunity to pick business person of the year and i picked richard scrusi. it's so hard to find an honest cfo. remember the guy that helped out? i think he was on his way up the

river or something. you have to pick it so there's an edge to it. >> like leo apatae or something like that. >> no, like mcafee. i didn't mention that, but he may get the squawk person of the year award today. it depends on how he answers your probing -- your father was a litigator, right? >> that's true. >> what we want to see today. that's what we want to see. >> okay. >> i want to see him wither under your cross examination. >> he's already pretty withered. >> yeah, that's true, he is. i think he's dangerous looking, though, don't you? >> yeah. withered, weathered, it's all -- >> weathered is much better than withered, actually. >> we do have our guest hosts here. let's talk about markets for half a sec. we're going to have mr. fisher on later. actually, let's do it this way. what is the question you want to know from fisher? i've been trying to think about it all morning, how to come at

him. >> so here is one. if we get the unemployment rate falling to the fed's new target but it's because people are dropping out of the labor force so that participation rate is going down, then what do they do? do they stick to the target? do they acknowledge that there's a bad reason for the movement? do they ignore it? i think with the targets, they're trying to get more clarity. i think they're genuinely trying to get more clarity. the problem is now they're going to be watching every cpi number, every pcu number, every jobs related number for the next couple of years related to when we get there. what we could see is more volatility in fixed income markets as people try to gauge every data point. >> are you surprised there hasn't been less volatility? >> well, it's also the end of the year and what's going on in washington has paralyzed decision making. >> what is that increased volatility in the marketplace?

we're not talking about volatility in washington. >> if you are a money manager, you are under the assumption still that whether it's december 28th or january 3rd, there will be a deal in washington. >> by the way, is everybody baking into the cake? what is the date in january at which people say, okay, maybe this whole thing is more screwed up than i thought? >> the market is going to force the hand of these politicians, just as it did with parts. so if it's december 31st, there's no deal been january 2nd, the market is down sharply. you can be sure that in the next couple of days, there will be some sort of deal. so i don't look at a drop dead december 31st date because i know the market is going to revolt. >> are we sure the market is going to revolt inspect some said the market should be revolting by now. >> and unless there's a deal -- >> go back to last summer. the s&p was flat, it was quiet, it was summer, it was ill liquid. and then right around the end of

july when everyone started saying this isn't working out, suddenly, between late july and august 8th, we fell some 17%. but it was nothing, nothing, nothing, and then, oh, there's something. and i think that's the risk today. >> so if you're an investor, if you had some money on the sideline now, do you put it in today or do you wait for this moment that may or may not happen? >> well, i wait. to me, there's one that there's a deal and number two is what are the terms of that deal? i'm of the opinion that that deal is not going to be any good in dealing with the long-term structural issues. and that is not a good deal in terms of what we're facing and in the context of a slow economy. if you're a long-term investor, you should be worried about the long-term nature of that deal. >> you see, we have more down side than up side. turn it around, jamie dimon said

two days ago that, you know, you get a deal, then you get a 4% gdp in this country. >> that's the assumption that, okay, i know the terms of what issing going on and now i can stop spending. but if i'm a small business knowing that my taxes are going up to this extent and my health care costs are going up, doesn't mean i'm going to know it now. in fact, i may retrench even more. >> no. and i agree with that. if we have a deal, and we take that off the table, i think that's a different deal than if we have some republican house members not even voting for something. so the details of what comes out, whether it's december or january, will affect how corporate and american consumers react. >> becky and peter will be staying with us for the rest of the hour. don't go anywhere. coming up, congress is heading home. they're getting out of town. but speaker boehner took one more meeting at the white house. are we any closer to a deal?

john harwood is next. a big monday is shaping up for "squawk box." named manager david tepper of the bernanke putt. i want to know the date when he was on when he said that because none of us -- when he said either the economy gets better and the market goes up -- when was it? >> september of 2010. either the economy gets better and the fed doesn't have to do anything or the economy doesn't do anything and the fed comes to the rescue. no one could have known the extraordinary steps the fed would have had to take in this economy wouldn't get better. all the way out until 2012, almost 2013. a rare interview. it will be great to hear what he has to say. we have much more ahead on this december friday. [ male announcer ] you are a business pro.

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welcome back to squawk. house speaker john boehner taking a meeting with president obama thursday. did they make any progress? that's a question john harwood joins us now with the latest on these epic negotiations. john, gives some sense that maybe things are -- something happening there? >> if there's progress there, disguising it very, very well. they met for a little will he less than an hour. people described it at frank on both sides, described it as frank afterwards and frank is a euphemism for we've got strong dpis agreements and did not make a break through. so, you know, i still think and i've always thought, as you guys know, that the fundamentals are in place for a deal to happen. but we may have to go over the cliff for a little while before

it happens once those rates go up in january. and once some of those cuts kick in before you get the kind of chasening that lawmakers need to make a deal. >> what do you see as the top sticking point at this point? >> tax rates. >> not attaching the debt ceiling? >> no, no, the debt ceiling is a second stage issue and that will be a problem if it's not resolved and i expect a big fight. >> what about these senators that some of them are really conservative. ron johnson is a tea party guy. he wants to give on the president before the end of the year and go ahead, i guess pass a bill that would extend the rates for everyone and that wouldn't pass in the house and say, okay, fine, we'll do it for 98%. put that in the president's court, get that done and is use the debt ceiling for spending. >> exactly. no, that is --

>> but he's not getting anywhere with boehner and cantor? >> it's because boehner so far is not willing to go along with that strategy. the way that it works for boehner is if he ultimately puts it on the floor and tells most of his members that they have a chance to vote against it and make playing their opposition to any tax rate increase. but he hasn't been willing to do that so far. he would get some republicans to join with dm democrats and it would pass the house. but he doesn't want to put something on the floor that would clear the house without at least half of the republican members. spending is a sticking point, but there is an asymmetry in the negotiations. democrats have laid out what they want on taxes, specifically they've laid out some specifics on what they want on entitlements, not as much as what republicans want. republicans want more, but they haven't said where they'll get more. >> this speaks to me because i

see the strategy. once you give on taxes and then you've got the debt ceiling, the people would be much less prone to blame republicans for bringing up the debt ceiling. once the president got his way on taxes, then it goes to spending. if the president doesn't really get serious about cutting spending, then it would be his fault if the debt ceiling is not raised. there would be no tax issue any more and you could focus it on the president. >> joe, you're having a mind meld with downcorker and -- >> that sounds painful. can i unmeld? i mean, i can get -- >> no, no, i'm saying that -- >> no, we agree. >> the smarter minds in the republican party are going towards the position that you just articulated. the problem is, that is very, very difficult for a speaker with a caucus as conservative has his on tax rates to permit such a strategy would happen.

he actually could get fired. i don't expect that to happen. >> does that speak to you, this strategy? i mean, then we could get serious on spending. otherwise, we're going to get some kick the can tax cut. >> i think it's important that we all put these numbers into perspective. 2012 revenue wise, the omb predicts that they'll be up $130 billion. that's without one tax increase. so just by natural growth, $130 billion of extra. so the government spent 3.5 trillion. we took in 2.5 trillion. we have a trillion dollar deficit and we're wibling about eight to ten days of the spending. so the government spends eight to ten billion a day. just some perspective. >> wes passed your tax increase, mr. president. what do you want to do with the

other 9% or ten percent or whatever it is. >> i'm not sure what your math is telling you about this 7% versus -- >> well, if we raised tax rates to 39.6 on the top 2%, how much of the debt are we running each year. >> right now we have a $1 trillion deficit to get down to $600 billion. the president is proposing 1.6 billion over ten. that's 160 billion out of, you know, $800 billion. so it's about a -- >> it's not 160. >> it's a little less than a -- >> but you're assuming the economy gets going. we've been running over a billion. some people think we're going to do a billion three this year. >> no, no, no. >> 1.6 trillion over ten. that's 160 of the year. >> no, no, i'm talking about other stuff. i'm talking about giving him the 2%. anyway, coming up, volatility,

the fed and the impact on the dollar. plus, nike wants oregon to go the extra mile. i wish i could talk to the governor and say i don't like these taxes. can you change them for me? mikey is big enough to do that. brian shactman will tell us why it could mean thousands of jobs. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

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andrew ross sorkin along with joe kernen. >> the two of us are together and in our continuing bro-man kre. each day, it enriches both of our lives even more, i would say, with no hypothetic of irony or sarcasm. >> no, we had a lot of fun this morning. >> we did have fun. then they played the deliverance song for us yesterday. a line line yumm still to come on an exclusive interview. i love richard fisher. he may be my former democrat. he's independent now, but he was a democrat. but he's a texas democrat. his first comments on the new fed policy. coming up, boeing ceo jim mcmurney. i'm more interested in him making sure all the plane res really good. and fixed. wouldn't you rather have them fixed all the problems with any

of the boeing jets? i mean, we can weigh in on the fiscal cliff, but i'm more interested in them making the greatest and safest jet possible. >> but then -- >> this is for you, i believe. >> it's like ripped from the headlines. >> it's like inside edition, wow. remember that sound when bill o'reiley used to do that show? >> you know -- >> you remember an intern. i forgot that. >> he invited the sound. >> prefox summer of 1994, summer of o.j. simpleson. i interviewed cato kalin. >> i was friends with him. he came in here president not--t really. he was friends with charlie sheen. even kato was not too small of a celebrity for you to be sort of enamored with.

i was 17 years old and thrilled. >> you are probably entitled to yo that sound because you were on that show. if we can get it, we're going to use it. robert frank. have you met -- he's a great reporter. he's going to be on talking about mcafee. i know him fairly well. >> you know him fairly well. you don't know and you don't know. >> no. >> this is robert frank. >> oh, my goodness gracious. it didn't even occur to me. >> watching you wonder where i was going was really -- you were like, where am i going with that. >> i saw frank chasing her around and i said, you know, she's on fast money. what are you, coming to the christmas party and he goes, we've been married eight years. wow, in the headlines, manufacturing activity, the whole show is very -- the whole network is -- everybody is married to everyone else. activity in china hit a 14-month high in december. except for you.

an encouraging sign for the world's second largest economy. purchasing manager' index rose from 50.9 from november aet's 50.5. chinese consumers will be able to buy apple's iphone today. that should help apple reverse the slide in china. they're in talks with china mobile. it's true, you can search tiananmen and nothing comes up. it's a square, but nothing about what happened actually happen. adobe systems is one of our stocks to watch today. it's projected 2013 profits are well below street consensus as the company transitions more customers from desktop software into its cloud based subscription services and those services feature more monthly

payments and fewer large up front fees. safe haven currencies are under pressure following the federal reserve's new bond buying program. ben lichtenstein is the president of trader's audio.com. david, i would just -- i mean, don't you know, haven't you forgotten more in the last minute than i know about foreign currency? >> maybe, yeah. i think that's quite possible. >> do you have any questions for david? >> well, no. i want to talk about japan. i know our audience is carrying a lot more these days about the fiscal cliff, but we've got another cliff of sorts coming up in japan, the electrics sunday. everyone is expecting that abe follows in the footsteps of mr. draghi and europe and mr. bernanke here in the u.s. we can more yen printing, that weakens the yen. maybe american investors can make some money in japanese stocks. i'd be curious where you think the election is going.

does it matter? >> i think the world has more possibility that your pen might change course as far as monitoring fiscal policy after the elections. but the japanese realize when you play with fire, you might end up burning down the house. jgb's nine times tier one capital, if they're not careful, they can trigger a run on jgb and the house base comes tumbling down. so i think actually the next government is tokyo will be a lot more cautious. i think the market is -- >> so we can get another huge disappointment. so everyone thinks the dollar/yen is finally going to go up, you can make money on the yen short and on the nike long and in a couple months, we realize that's not going to be the case? >> no. i think much more important for japan is the outcome of the fiscal cliff resolution.

i think if the fiscal cliff resolution tushs out to be more, i think the yen will be one of the best performing currencies in the first quarter. and if i can keep going -- >> take over. >> i'm having fun warming up. this is a good. >> you're a good host. >> thank you. i'm kicking in then. let's talk about the dollar broadly. we've had the fed now, what, qep as we're calling it this morning. low hates here forever for the foreseeable future. what does the dollar do here? do we want to keep telling dollars against what? you're saying maybe not. >> i think the fed is largely a spent force given at this point real yield when it comes to inflation and bonds. i think if we end up with some fiscal austerity in the u.s., and i'm expecting $300 billion for fiscal tightening next year.

the last time we had a major dollar basically in the up trend in the late 90s was basically the dramatic improvement at the end of the 90s. if congress decides to do the right thing, and i think they have no choice but to basically impose fiscal austerity. that's reassuring for the u.s. dollar. >> and that's one of the most amazing things about the dollar. when our economy does really badly, the dollar does well. people buy tee bills. even if the government is frustrated and the fed is frustrated, there's nowhere else to go. >> and, peter, i feel like i've read in all of your writings somewhere there will be a tipping point with that. >> with the dollar? >> yes. >> i think we've almost reached it. they said why is the euro at 1.30. i said ben bernanke is the euro's best friend.

we're the reserve currency of the world. i think that says a lot. will we get some dollar strength? well, look at the context. gold has gone from 250 to almost 1700. what is the dollar the going to be strong against? it's all a relative game. i think 85 billion of newly printed money in the u.s., got is going much higher. to me, that's a ultimate treasure of the dollar. >> ben, wa do you want to talk about? do you want to weigh in on that or the market's inability to move higher? i thought this was the qeb that trades would just love. i said yesterday i thought they would be main lining that news from yesterday. but they love this stuff and it was down three points that day. >> yeah, for the most part, i completely agree with what was just said. you guys know i look at the

market from a much more technical perspective. the euro currently was just brought up. i think the reason it's holding up above that 1.30 handle is we've seen all-out support from the european and basically the initiative or thought process that they're willing to do whatever it takes to support that currency. but really, all these markets for the most part in my opinion are a bit of a holding pattern. look at gold, in a year we've seen 1550 to 1800. crude, which has been establishing value to the downside for the most part and certainly could open up to the downside, these markets right now coming into year-end, at least, considering all the uncertainty that's playing, we're not really seeing that fear factor at play right now. i had a couple of clients ask me yesterday, at what point do we start to sell off in the market under the assumption that we're not going to have a fiscal cliff deal? but we're really not seeing that. volatility is still holding at lower levels at this point. the fear factor just isn't there

right now and it comes from this general overall census that the power that's be are willing to throw whatever it takes at these markets to sustain them. calling kicking the can down the road, whatever you want to call it. but we're having a hard time getting above preelection levels right now. this week, we just traded up there. again, we rejected those levels. were clearly rejected that lower level that we saw earlier, a few weeks ago, that 1340 level i think it was. but, again, i don't see -- and i've been saying this for a few months now. i don't see any real major market movement in anything across the board. >> okay, ben, we have to leave it there. david, thank you for coming through the other day. leave it there. appreciate it. thanks. >> if you have questions on anything you see here, mikey playing offense with big expansion plans. big question whether oregon will play ball with one of the state's biggest employers. and then at the top of the hour, dallas fed president

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. welcome back. u.s. equity futures will get back more than half of what we gave up yesterday. brian shactman, you set your alarm. you were out, too, a little bit late night, weren't you? >> a little bit. i'm not hung over. i have -- >> put some makeup on you? >> i probably need more. >> the governor of of oregon is calling a special session today for nike.

i wish i could call the governor and say, you know, this one tax year, it's not good for me. >> and he literally said -- >> and how high on the way up. >> and the truth is, he had to. oregon only has two fortune 500 companies headquartered in the state, right? i intel is the biggest employer, no hq there. nike impossible wants to expand, but i told the state we need some tax certainty or we are a free agent. the state called a meeting today to pass legislation to maintain the current tax sturt temperature. all mikey has to do is hire a 00 new workers over a five-year period. a study says this project could be a lot more, over 12,000 director indirect jobs and 2 billion a year by 2020. it's enough that the governor is taking no chances.

he said, quote, this is a huge win for oregon. it's an easy call and anterior pekt fit with our strategy to attract and retain companies that create jobs and boost prosecute per capita revenue. nike is a global company and their sales are based on sales in the state instead of a combination of property and payroll. most of its sales were outside of oregon. people tell me -- this is the key, joe -- their worst state is hovering trying to post this guy. there is a new article that talks about lots of different tax benefits and other things. >> mikey, a huge -- they have a

huge campus. they have all -- whould they hae really left? >> i think they might not have left their headquarters, but they may not have expanded. nike pays, i've been told, only about 10 mers of what they should pay under what it should be taxwise. and they just want to keep this sweet deal. you talk about certainty, but i think they would go, but they wouldn't have changed their headquarters. they are identified with beaver, oregon, forever. >> this sa a competitive market. >> is nike's business bigger than the pop business in oregon, do you know? >> i don't think there's enough pot smokers that have the money to make it big. but just inside, i say the pot business is probably equal or greater. so you said two business. there's really three.

but we just don't talk about -- we may. >> not legalizing it in oregon, which is surprising. i went to oregon about a year and a half ago and -- >> you couldn't get any there? >> i mean, if you have a guitar on main street, you're out of place. >> you have to have a case of anxiety to get it prescribed. you can be anxious about anything. >> we're going to do the interview of john mcafee from oregon. >> thanks, brian. coming up object, our fiscal c. also we'd like to talk about texas. our guest host next hour, gop strategist kevin madden. where do we start in asking him where he went wrong? he'll be here. "squawk box" coming right back. . our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america

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growth in the markets, we'll have explosive growth in this country. >> how high will the market go? >> we've been taking advantage of volatility. days where there's panic we'll have a buy list ready. >> i think technology is kind of interesting. >> the second largest customer of china, the u.s., avoiding the fiscal cliff, will be very good for them. >> defense cuts seem to be around 9.4%. a lot of people trading on that. >> welcome back to "squawk." we do have a quick programming note. you can catch rebecca patterson on fridays on "money in motion." let's get some final thoughts from her and peter this morning. you said something during the break, i don't know if i can bring it up. you said, the level, we were talking about it in the context of taxes and big companies but in the context of investors. i don't know who we were talking to yesterday when you said -- oh, the guy from e-trade, right, joe? he said do you think that retail investors have a chance against institutional investors? do you think it's -- is the

answer that there really never will be? >> i think you do your best, right? i mean, if you're an institutional investor and you have a huge staff and you're the ten banks who want to do business with you and are giving you their research left and right compared to my mom, do they have an advantage? of course they do. so from that perspective, no there's not a level playing field. if you have companies that can get tax breaks and all of us are talking about the fiscal cliff and where our taxes are going, is that a level playing field? >> there's no ways to be nimble on this -- >> i agree. >> the mice running around with the big elephants. even if it's in a fence, you can even run in and out through the fence and the elephant is stuck. i mean, if your mother, i said this yesterday, if your mother watches cramer or does a little bit of, get a decent broker or something, i mean, there's advantages to not being a big institution. >> i don't disagree with that. i don't disagree with that. any one who uses common sense and does their homework can do just fine. >> but we've been in a croppy market for twelve years.

>> i think the market's changed. >> well, it has structurally changed. >> because all you've seen is the last twelve years, really. >> but even then -- >> when the market went from 800 to 12,000. >> you've got a global capital flows today that are multiples what they were twelve years ago. globalization is different. we react more to the chinese market today than we ever did in the past. so the market has structurally changed. >> but we haven't been selling so many nikes over there and so many coca-colas and so much delicious kfc. >> it's delicious. >> and it's like the greatest -- i love kfc. i can go into any of yum brands restaurants. >> biscuits in particular. >> taco bell. taco bell. i can. anyway, peter, thank you. >> thanks. >> keep sending us e-mail so i know what's going on. >> of course. >> we've got to go. thanks, guys. next more of today's top stories. plus, an extended interview with "squawk" newsmaker dallas fed president richard fisher.

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big fed interview. inflation hawk and dallas fed president richard fisher, on the latest that happened this week, the unemployment target, the state of the economy, and getting a deal done in d.c. to avoid the fiscal cliff. cracking the consumer code. a look at how a new bar code system is changing the way consumers shop, and how businesses think. >> plus putting to the the pieces of the fiscal cliff puzzle. >> you used up all the glue on purpose! >> the ceo of buffalo games on why there are no winners if we go over the cliff.

the second hour of "squawk box" begins right now. good morning and welcome to "squawk box" i'm andrew ross sorkin along with joe kernen. becky is off. in studio, helping us rise above, executive vice president for jda front line and served as a senior campaign adviser on mitt romney's presidential campaign in 2008 and 2012. we're going to talk to him about that and a lot more. see how the market's looking this morning, 45 points higher the dow would open up right about now. s&p 500 would open up about four points higher and the nasdaq a little over three points higher. headlines, republicans and democrats still haven't agreed on a resolution to the fiscal cliff issue but they're still talking. house speaker john boehner met with president obama at the white house thursday evening, the two sides said very little about the meeting other than that it was frank, and that lines of communication remain

open. frank doesn't really sound very good. sprint's 2.1 billion dollar offer for the ring of clearwire could be running into some resistance. some shareholders are now said to want more than the $2.90 per share that sprint is offering. japan's softbank which is buying 70% of sprint wants to limit how high that offer can go. and pfizer reportedly considering an early 2013 initial public offering for its animal health unit, according to "the wall street journal." which says that the final decision will depend on market conditions, of course. but puts the possible value of that ipo at about $4 billion. >> frank is a -- frank is different than like conciliatory, right? >> the house ways and means committee chairman, when they would say he was having frank conversations, it meant that someone was looking over -- >> yeah. it means that, you know, you're slow-walking this thing with no spending and it means, you know, boehner, you're still not doing what i want to do on the revenue side. that's frank. it's each person trying the

other -- >> i think that's worst -- >> you know what i summed it up. you know when i summed it up, it's your mother and the other guy says, no your mother, and the other guy says your mother and they just keep going back and forth. that's frank. it's not conciliatory. and then you leave after saying that and say, let's do this again and the communication lines remain open. it doesn't -- no one should feel -- you saw what the market did with frank discussion, down 35. kevin has already spoken. he's been calling for certainty on fiscal policy and advocates limits on more stimulus programs. oh, we're going right to -- has been -- kevin madden is here. but we're going to introduce you after we talk to our newsmaker of the morning, richard fisher, dallas fed president. normally we look forward to having you in studio, richard. but i think maybe, given what happened this week, we need a little distance from where you are. a lot of times in the past you've struggled to maybe remain

positive about some of these extraordinary moves. can you really sell this to me? are you on board with what we heard about on wednesday? >> first of all, just so you know i'm in a studio here in dallas, set up by paul volcker's nephew. so interesting contrast. >> you said it, not me. that is interesting. go ahead. >> no, i -- look, again, we are a team. we are a committee. there are some of us that argue against what we decide to do, i was one of them. but the committee makes a decision as a whole and proceeds. and i'll use that as a way of saying there's a very sharp difference and contrast to the way the congress operates or the way the congress works with the executive. we have very frank discussions, it's civil. i argued that basically we were at risk of what i call a hotel

california, monetary policy, going back to the eagles song which is you can check out any time you want but you can never leave. that's what i worry about. theoretically we can check out any time we want from this program but we practically, because we're going to have an engorged balance sheet, we may never be able to leave this position. so i have some concerns. i was concerned about the 2.5% mention, even, of inflation one or two years out in terms of expectations. the market becomes fixated on the unemployment target that we actually install its threshold, not a target that we put in there. but, i lost my arguments. there are others that argued similarly. they'll let them speak for themselves. but here's the thing, the committee makes a decision under the leadership of ben bernanke. this is ben bernanke's fed. its his legacy going forward, and then we leave the table and we're still friends. so, can i sell it to you? i can't sell it with passion. but i will say that this is action in a city called

washington, or sometimes in texas we call it washington-stand where people never get anything done or don't appear to be easily able to get things done. we do get things done. we make a decision and we proceed. >> i think that's one thing you can say about the fomc and this leader's chairmanship. we're going in new direction. the question is, is the efficacy of what we're doing solid or not? we'll continue to examine that. and if it's not, we're going to have to change course. it's the best i can tell you, joe. >> i understand. i understand. and you're a reasonable, calm, conciliatory, collegial, the fed is very collegial. but i would -- >> that's right. >> -- at some point wonder whether you might just snap? because you've been on in the past, with much less significant, and much less -- much smaller actions were being taken that really raised your eyebrows, and i -- that we know you really weren't behind. and maybe it's the, you know, as it keeps happening nothing surprises us anymore. it's like, you know, when we

were going to do another $40 billion a month, people didn't really think that was that great of an idea. and that was going to be for maybe nine months or something. but then to go to 85, basically where you're assuming the unemployment rate gets down to 6.5. we don't even know if that's going to happen. it's almost like a permanent $85 billion a month. when do you just say, enough? i cannot just sit here and be collegial. we're out of control here, mr. chairman. >> well, i will always be collegial. and i think everyone at that table will always be collegial. i thought we had done enough already. businesses are awash in liquidity. i don't know a single -- >> that's a year ago. >> -- except for 2% of the national federation of independent business, small, medium-sized businesses, those are the ones, it's that low now, that feel they either need better access to capital, need more capital, or want more capital. and then you go to the big guys, the one thing you can say, joe, is we have led the releveraging

of corporate america, public and private, the cost of funds is nil. their balance sheets are much better structure. disney issued just before our meeting a three-year notice, 45 basis points, tied texas instruments for the all-time historic low. so we have a very -- here's my argument. we've done enough. mario draghi made the same argument the thursday before our meeting. we'd done much. it was now, as he said it, the head of the european central bank, it's now up to those that created the unemployment problem to solve the unemployment problem. i believe that it's not monetary policy that's holding back employment. i believe that there is a question of efficacy about the purchase of treasuries actually leading to real economic activity. one thing i and my colleagues are certain of, the balance sheets are in much better shape, business is ready to roll, they need final demand and what they need is clarity and rules of the road. who do you turn to for that?

you turn to the fiscal authorities. we can print all the money imaginable. no one's going to deploy it to create new jobs, this is driven by a need to fulfill a congressionally given mandate to us that we have to work on two fronts. price stability, which we have right now. even by the dallas fed standards we calculate things differently, it's running less than 2%. that's not the issue. inflation. and i'm a hawk. that's not the issue right now. >> right. >> the issue is the second mandate which congress gave us and we have to act under the law. as long as we have that mandate, we have to move in that direction. but, we're not the obstacle. the obstacle is nobody knows what the rules are, so therefore they can't plan their investments. that goes back to the house, the senate, and the executives. >> the other -- i -- >> i think doing more, in my book, and i'm in a minority, but in my book, just encourages these people on the hill not to get their job done. >> richard, we -- in the past, we worried about commodities, inflation, and we actually may have seen some in the markets.

now the fed has cover because europe's week and draghi is on board and it's like beggar thy neighbor, the dallas doesn't necessarily go down. but you also used to get some benefit from announcing qe. the market would do something. it was down three points after 85 -- it's like the benefits are gone of doing it at all it seems like. and what you said -- >> that's the question. >> the roach motel. you're never going to be able to check out with a $7 trillion balance sheet. >> it's actually hotel california. >> yeah, the roach motel. >> not everybody else is good, don henley is a texan. >> the roach motel is even better because the roaches go in there and then you find like 12 of them, and none of them are reporting room service or anything. anyway, go ahead. >> look, there was a muted response. there's a lot else that's going on right here. i mean, everybody is fixated on two things. one is the fiscal cliff. the other seemed to be susan rice. i'm withdrawing my name, by the way, for nominee for whatever. but that seems to be the news cycle right now.

and it was muted. you never know when people are already positioned and unwinding their positions because we either disappointed or achieved what market expectations were. so i don't look at things in terms of the immediate response. but i would argue, personally, that the efficacy of these programs, their impact, is declining over time. we will be, as a committee, and the staff will continue to look at this, and monitor whether or not this is actually having a positive impact. but it's clear that with each new announcement, there's less of a reaction. you have to be very careful in terms of judging this reaction, because this is a relative game. the dollar strengthened, didn't weaken, so that would send an immediate signal that we're maybe not getting the foreign exchange effect we would like. however, i don't think you can judge things based on two or three trading days' activity. remember the competition is much weaker than we are. we are the strongest economy in the world right now. we have the best american operating businesses ever.

and we're ready to roll if congress would just liberate our businesses to go out and create jobs and invest in new cap-ex, which we can afford to do now. and part of that is, i have to admit, thanks to the federal reserve. you got to admit it, too. >> all right, i admit it. andrew, i think we're going to -- i think we're going to take a break. i don't even want to take any breaks with you. but we're going to have to take a break. i don't know. will you stay with us and then we'll be back as soon as we -- these are great commercials to watch. you probably enjoy them, as well, richard. thanks. we'll have more with richard fisher and andrew, are you ready? >> i'm ready. >> checking the futures right now. and we should check them, whenever the dallas fed president talks. later we'll get to kevin madden. ghost host, former romney campaign adviser will react to ambassador wise withdrawing her bed to be secretary of state. we have a lot to talk about. >> comments?

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we're back. let's continue our discussion with richard fisher, dallas fed president. and richard, one of the questions i want to ask, i was

talking to steve liesman about this yesterday, do you think that your board and your chairman is now effectively overcommunicating to the market to the point where we don't really -- we actually understand less rather than more about what's going on? >> well, the verbiage that we put out after every meeting has expanded significantly. the theory is that we want to signal to markets in a sufficient matter so that we don't surprise them. and very importantly, they can anticipate in a way with, again, greater certainty. the path we're likely to follow. the most important thing, of course, to communicate, will happen after we begin to tighten. we'll call that post-liftoff. >> but in the same way -- >> but you're right, andrew, from the standpoint that there's a lot of verbiage hire. and i don't know if it's actually -- we'll have to just watch this. i don't know if it's creating more confusion or not. i'm of the old volcker school. i would be communicating as little as possible. but there is a demand for

greater transparency. and i'm sort of torn on this issue. it's not clear that it's terribly effective. theoretically, and this is, of course, pretty widely embraced economic theory, again you never really know the difference between theory and practice what really works. but theoretically it's a wise thing to do and we're driven heavily by theory. this is a heavily academic market committee. probably the most academic in history. driven by a theory that makes sense. but we'll have to see whether it makes sense practically. >> it may lock into positions that may give you a little bit less flexibility in the future. >> i'm selling everything at 6.6% unemployment, i tell you that much, because i know it's ending. getting out of everything. >> here's one of the questions about -- >> these are thresholds, joe. you have to look at that wording extremely carefully. >> if we ever get there. we may never get there again anyway. >> first of all, one of the questions about 6.5%. what happens if you get to that rate as a function of the participation rate going down?

>> that's a very good question. we actually talk a great deal about that. all of us are concerned about it. and that's why if you look at the wording in the statement, there's a lot of conditionality around that. i will point out, by the way, because you know i love to talk about my own state, we're already at 6.5% unemployment in texas so i don't think we have to do much more in terms of monetary spending? >> yeah. >> but your sense is -- >> is there flexibility around that in terms of a change in psychology on the board if, for example, the rate does come down but not in a way that you -- you would be happy with? >> i think the chairman addressed that during his press conference. there's -- yeah, i could see members of the open market committee saying yeah, we're there, but, look, it's not don't think this as a hard fixed number from that standpoint. think of it as a threshold as we approach it and as we see things proceeding. what worries me here, and you ask for the differences is, this is fiscal policy. we're getting closer and closer to fiscal policy, discerning

whether we get the right kind of employment and so on. i don't believe that's the federal reserve's job. however, what i believe is not what's important here. we have this dual mandate. this is a further refinement of that dual mandate of trading monetary conditions to unemployment. i'm a little worried we're getting tangled up in our own nickers here in terms of trying to make that a very specific thing. qualitative as well as quantitative and i do worry that by trying to discern whether it's the right kind of employment or not the right kind of employment, i don't think that's the job of the central bank. but, again, i'm in a minority. >> but so here's the question -- >> but i'll keep arguing that point. >> the obvious follow-up is if we do go over the cliff, if we see markets respond in a very negative manner, what then is the role of the federal reserve, going to be or should it be? >> well, what it is right now, we're the only people who get things done. i would agree with, i think the majority of the committee. we've been holding things up.

but, we, again, ben bernanke says we cannot substitute for a proper solution to the fiscal cliff. and i hope there's not a single person in congress who believes that monetary policy will bail us out. there's a limit to our effectiveness. and if they don't get something done, and it can't be a temporary fix, joe. it has to be a much longer, more dependable, businesses can plan around, consumers can plan around, and you don't plan around a temporary fix. you plan around where you think things are going. we have competition, a globalized world. there are other countries where we know they say taxes are going to be "x" for 15, 20 years. it's a golden handshake and their capital goes in that direction and jobs go there. our problem here is we have these temporary fixes, and if you have temporary fixes, i don't think businesses can plan cap-ex or pay roll expansion. these are long-term investments. less jobs would be created. consumers cannot plan around that. and we're beginning to see, now, this fiscal imbroglio as really

impacting consumer behavior. we've seen it in the last few data points. we need something that's more important, more convincing. it's a tough job because congress and the executives have abused their powers for so long on this front. we cannot possibly substitute that. it's not just my opinion. ben bernanke's argued that himself. >> richard, what say we get to january? is there a plan in place? have you had discussions about steps that the fed might take if, in fact, we go over this cliff, and, in fact, the markets do fall precipitously? >> i don't think it's my role to say what we talk about in terms of contingency planning. i think what you see is what you get right here. we have a very, very hyperaccommodative monetary policy. we have a chairman who has prepped, in fact coined the term fiscal cliff. pressing, pressing, pressing, which he did in the conference. you have people like me who are less polite and accuse the congress of misfeasance, and we just have to get this done. there's no other solution here.

it's up to the congress to deal with this -- and do it in a way, this is the most important point, joe, do it in a way that incensed people, consumers and businesses, to take advantage of the cheap and abundant money that we, the central bank, have made widely available. if they don't do that, that's the key thing. it's not just, where do you cut, and you know, how much you raise taxes, it's how do we incentivize the american people, consumers and businesses, to put that money to work to create additional demand, and to create additional jobs? if they don't get that done through this and they get away from all the slots and the numbers and the kind of political posturing that they're doing right now. focus on what is best for creating jobs for americans and increasing final demand for our company so that they will hire more people, invest more money, put more people back to work. that's what this is all about. and not do it with a short-term fix. it has to be a long-term incentive. and one more thing i want to argue very quickly, our

businesses are better equipped now to compete in the world than ever before, they've driven down their costs. they're hyperefficient. they're hyperproductive, they have mastered i.t. and they have very strong and well financed and cheap debt on their balance sheets. so they are in great positions, and i really do believe, you know my old joke we are the best thing in the horse factory, we're the thoroughbred of the global economy right now. unleash that power. that's what congress needs to do. >> if things all work out perfectly richard, i could see it how the fed providing a bridge allowing congress to get its act together to where we can do the long-term structural things we need to do to really grow the economy from the ground up, instead of all these enabling -- but it just worries me that you might be an enabler for these guys, in this, you know, the fed becomes the permanent enabler and the training wheels never come off because, you know, that's the scariest thing, you know? >> well, i'm totally against --

i can't speak for my colleagues, i don't think any of my colleagues want to serve that role. that's not what central bankers should do, and it would be -- every time that's happened in history we've had an economic disast disaster. and we all know the history. we cannot count on the central bank to carry an economy. there has to be incentives to take what the central banks do, provide monetary stability, provide just the right amount of liquidity to the economy, incentives to put all that to work, a stable financial system, and grow the economy. you depend on us entirely. and we're going to end up going down that road. i keep talking about the road to perdition. and destroying our economy. so, i'm begging members of congress, and the executive, to please get something done here that reassures consumers, reassures business operations, most important of all, to create the jobs in america, and these are permanent jobs that we want to have created. please provide them with the

incentive to use the monetary wherewithal, whether it's the right amount or an excessive amount which i would argue, but that's not the issue. the issue is, they need to be incentives to use widely available liquidity, the lowest interest rates in american history, put it to work, to create more american jobs, and increase american prosperity. >> if we're really arguing -- >> unless they do that they will have failed the american people. >> the fiscal cliff brings a lot of austerity very quickly. but we all think that, you know, sooner or later we need some type of austerity, whether it's on a scale, you know, like the fiscal cliff is a 10, we don't want a deal that is a 1, that just, you know, that doesn't cut spending, that doesn't raise revenue. so i just worry that, you know, we seem like we don't want it, we never want any pain in this country anymore, and we know what happens when you don't clear the system. we just seem to muddle along. >> well, this is the issue. this is what leadership is all about. and we've had congresses that literally for decades have kicked the can down the road.

you look at eisenhower's final speech, his departing speech, remember eisenhower, you may not have been alive then, but i was alive. andrew wasn't. one of the great presidents of all time. okay, andrew wasn't, he was just a boy, but here's what eisenhower said. we cannot mortgage the future assets of our children and grandchildren. that was ike. since eisenhower's administration congress has practiced greater and greater degrees of misfeasance and they've completely ignored their fiduciary responsibility. i wish that people had listened to that great man. now we've got to a point where we're deep in the hole, something has to be done, these congress people have to reach deep into their souls and provide leadership, not just do what's popular. but again, we have the monetary wherewithal right now. it's huge. it needs to be taken advantage of. and you talk about us as rich. i referred to this years ago when we went down this path, the best way i could justify is rich

financing to a sane and rational fiscal policy. you know, we have to be careful, not a bridge too far. you cannot depend on the central bank. >> you must love our rise above -- you should have a button, we got to sent you one, because we keep telling these people rise above. they need to do that, don't they, richard? >> they do. >> they do. >> i don't want you to conclude this interview until i brag on texas for just one minute. >> not the long horns? >> give me that opportunity. >> you got 20 seconds. so we know about that. we had perry on for two hours. he did a little bragging. >> just so you know i think we'll close this year with our own what we consider our texas gdp growing 3.5%. job growth a little over 3.2%. >> awesome. we got -- >> good place to come. >> i'm going to say good-bye and we'll be right back. thank you very much fed president richard fisher. we'll be right back. meriprise fl was founded back in 1894, they've been committed to putting clients first.

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together for your future. sfx- "sounds of african drum and flute" look who's back. again? it's embarrassing

it's embarrassing! we can see you carl. we can totally see you. come on you're better than this...all that prowling around. yeah, you're the king of the jungle. have you thought about going vegan carl? hahaha!! you know folks who save hundreds of dollars by switching to geico sure are happy. how happy are they jimmy? happier than antelope with night-vision goggles. nice! get happy. get geico. fifteen minutes could save you fifteen percent or more. welcome back to "squawk box." breaking news. fed president jeffrey lacquer, the lone dissenter in the meeting this past wednesday and he's issued what has become now a pretty normal statement on his dissent. saying that a single economic indicator does not show the

complete labor market picture. that in opposition to the 6.5% unemployment figure in the statement. tying the fed funds rate to the unemployment rate he says is not appropriate and he prefers to describe unemployment in qualitative terms. he also objects, as he has in the past, to purchasing additional mortgage-backed securities. that's also part of the fed's program. he is saying that doing so tilts the flow of credit from one sector of the economy to another, and particularly says nonconforming mortgages to those that are conforming. he did agree with the decision, though, to drop the date-based forward guidance. that's something he has talked about in the past, along with others. that's one of the reasons why they did move from that calendar date, that mid 2015 promise to something else. but apparently the something else was not to his liking. he also says, as he has in the past that further monetary stimulus runs the risk of raising inflation and destabilizing inflation expectations. andrew? >> so, steven, we got lots of input from different sides --

>> so collegial. bernanke reminds me more and more of like bloomberg. i mean, what he says -- i -- i asked richard fisher, why don't you just snap? a year ago he didn't like what was happening. and then you do with what happened on wednesday and there's still collegial and he's still like, yeah, i really don't agree with this. but sooner or later these guys might just snap. i mean, it's good to be king if you're ben bernanke, right? >> i think so. maybe we could all learn a little bit and get along that way, joe. you know, i mean, have our arguments, keep it on the point, don't let it get personal. and then maybe you could make some progress, like what fisher said was sort of interesting in that regard. that's when he told us last time, hey, congress, look at how we do business. it's a good way for us to do business. i also think that there are, though, real serious objections here. however, what i think you find is that fisher and lacquer are pretty much in the solid minority. and that was one of the surprises from the wednesday meeting was that bernanke had enough consensus to go ahead

with moving from the calendar date to the economic -- >> do you like hotel california for the balance sheet or roach motel? what do you think -- >> i was afraid you were going to ask that question. i haven't had a chance to consider those very eloquent metaphors yet, joe. >> the roaches die and rot -- >> you know being a rock 'n' roller myself i would prefer the don henley. but the roach motel one is pretty graphic so i kind of like that one, too. >> because they all go in. you can't even believe how many roaches can fit into one. >> you've had some experience, joe, with that? >> everybody has seen a roach. >> i thought this whole thing did get a little personal. when richard said -- when he said this is going to be bernanke's legacy, right? >> right. >> we're going to -- >> he did >> he did disassociate itself. one thing interesting was he said, look, one of the reasons we've come back is because of the fed. well, guess what? fisher has pretty much dissented from all those things he just gave the fed credit for doing. >> he said that's why rates --

we've gotten rid of some of our debt. what did he say, we've re -- you know, that we've been able to save a little bit and pay off some of our -- but he didn't really take too much. i don't think he thought anything in the last year and a half, really, has been necessary. did you hear how he started with, i'm in volcker's place? and how ironic. >> in volcker's place, that's right. >> steve, thank you for this. appreciate it. bringing us some extra fed news this morning. let's talk about some other headlines this morning. we're going to get another fresh batch of economic data in just about an hour. the november consumer price index expected to show a drop of 0.2%. core rate which excludes food and energy is seen rising 0.2%. later this morning, we can get november industrial production figures. also greek leaders are proposing a new tax reform bill with a top tax rate of 42%. that would hit people making more than 42,000 euros a year. the equivalent of about $55,000. the current top tax rate in

greece is 45% for those earning more than 100,000 euros. finally, business sentiment in europe is slumping in part due to economic uncertainty ahead of this weekend's election. the bank of japan sentiment index dropping to minus 12 from minus 3 in the prior quarter. that was a bigger drop than economists were expecting. mr. kernen? >> all right. getting all these things. so you like he's like bloomberg? no 16 ounce -- >> guy runs -- >> you know. >> no 16 ounce anything over that in sugared drinks. comments, questions about anything you see here on "squawk," e-mail us at squawk @c in.com. you can also follow us on twitter @squawkcnbc. still to come this morning, john mcafee. in the flesh. well he won't be here but on camera. in his first interview since arriving back in the states. an interview you've got to see. plus. have you seen these? want to know how to use them? one of the new ways retailers are hoping to win over

consumers. we're going to explain qr codes. the bar code guy died yesterday. can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on grounipping at fedex office.

it's a final countdown to the fiscal cliff, both sides are still accusing the other of not moving toward a compromise. kevin madden is executive vice president for jda front line and served as a senior campaign adviser on mitt romney's presidential campaign. in 2008 and 2012, it's been long enough to where we just -- we don't need to do any postmortems. you've done -- we've talked off camera about some of that. but, the -- as we've seen this new proposal from some of the senators, like ron johnson, about go ahead, let's go ahead and have the house pass a tax cut just for the 98% and let it go up on the 2%, then move on and put it back to the president's court, and go with the debt ceiling for spending cuts. >> i've seen some of that. >> will that happen? >> what i think is a lot of these republicans right now are trying to use the leverage of the fact that the president

knows, and the media knows, people in the audience know, it's a public audience knows that -- or at least they're trying to make the argument to the public, that even that top 2% is not going to solve the problems. and what they really want is the white house and others, the democrats, to come to the table on the entitlement cuts, and on the -- on some of the spending problems that we have. and that that's the real heart of addressing this problem. >> right. but what would the president -- >> because all we're doing right now. >> but if the president didn't have that 2% argument to talk about what would he be talking about? >> that's right. >> and oddly enough i think republicans get more leverage every day even though there's been this sort of washington devotion to looking at the polls and who's going to win in the short term and long-term. i think, you know, having worked for john boehner as well, i think he's very disciplined in that sense. i don't think he's going to be moved to sudden movement just because polls are saying one thing or the other. that is a real, you know, sort

of fulcrum i think right now on the negotiating side for republicans. >> do you think any republicans are starting to think, if we start doing mortgage expense, we start doing state and local taxes, we start doing, really getting into the charitable deductions, and that is a -- >> that's the really hard part. >> and the same job creators are going to be influenced by that, are they just fine with saying okay, two-point, what is it 4.9, let's just do it? >> it has to get done. i think that's the problem with the campaign part of it, right? we avoided a lot of these specifics, i think on both sides, because nobody wanted to get pigeon-holed in, or boxed in on any of the deductions, and the political popularity, unpopularity of some of the polls. that's why these negotiations in washington, they take so long. there's a couple things that really move people which is the deadline passing in washington, and the smell of jet fuel around

christmastime, or around august. >> they like to go home? >> they like to go home. jet fuel usually gets a close vote done and the deadline. i think right now it's interesting. two weeks ago the same conversations that we were having about revenues and who was up and who was down and who had the leverage are the same ones we're having today. i expect in two weeks -- >> how do you handicap it? >> handicap it how. what happens? the last minute? what day? what's the tipping point in all this? >> i tend to think, i tend to give a lot of credence to the smart people who think that this is -- there's a difference between going over the cliff and staying over the cliff. i think that we may -- >> so we're into january? >> we may be hanging onto the cliff, and that's where the deal gets done. and we're looking at right into early part of january. where that pressure, both from the constituents back home, and just the overall pressure of leaders in washington. >> we'll be back and talk more.

but up next. how technology is changing the way shoppers shop and retailers think on "squawk box" will be back after this quick break. >> when he speaks, markets listen. david tepper joins us for a special interview. what's on his mind list for 2013? find out at 8:00 a.m. eastern time monday. to the best vacation spot on earth.

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welcome back to "squawk." becky couldn't be here today. but she did want me to pass along this note about a fund-raising event for first responders who lost their own home while working to save others on the jersey shore when the storm hit. the long island beach area of new jersey tomorrow, go to buckalew's between 5:00 and 7:00 p.m. one of the first businesses on the island to completely rebuild and reopen for business. all proceeds will go to the cause. >> long beach island. >> retailers are betting big on new instore technologies to change the way consumers shop this holiday season. one of the technologies invading store shelves is the qr code.

cnbc's courtney reagan is here with more on how this new bar code is helping retailers. courtny? >> hi, good morning, andrew. you've probably seen those little jigsaw puzzle-like pieces popping up all over when you shop in store, even in catalogs. if you've glanced over them so far this holiday season you might want to take another look. more and more retailers are banking on these little square codes to give them a competitive edge and change the way you shop. they're called qr, or quick response codes. and they're invading store shelves and advertisements. a recent study found that there was a 1,253% increase in qr codes from 2010 to 2011. the codes aren't new, but what retailers can do with them is. how do they work? after downloading a code reader app to your smart phone, you can

scan qr codes and instantly access additional material online. but now, target's taking it a step further. hoping the codes will make buying more convenient. scan a code on one of target's top toys this holiday season, and instantly buy it online with free shipping. target's not the only retailer in the game. macy's and best buy use qr codes and walmart is using the codes to freeze virtual stores. in a partnership with mattel the retailer created a virtual pop-up shop. commuters can scan a code and buy the toy on the go, catering to the new generation of gift givers as santa goes mobile. so retail marketing directors are spending quite a lot of money on this. a lot of analysts are confused as to why. because it seems to be a mixed picture as far as reaction to actually using those codes. some of them were confusing. you don't exactly know what they do and how they work. i tried to go to a target to use

one. actually couldn't find them in that target location yesterday. so it seems to be a little inconsistent as well. >> thanks. saying the bar code -- the guy who created bar codes, 91 years old, mr. woodland is his name, he died yesterday. >> i was in a supermarket yesterday and they can just pass an item over this thing and the price goes up. have you seen that? >> that is true. you've seen -- >> heard about that. >> you use qr codes? >> no, i don't need to know. i don't. >> qr codes are great. >> really? >> if you're going through magazines now, you can barely go through one of these magazines without seeing the little qr codes. >> and you do it? >> you have your iphone or whatever your droid with you and take a picture of it and it literally takes you right to a website and you have all this information on it. >> i know about it, and i know how to do it but i just don't. >> i'm starting to use them more and more. >> let's get to this. holiday shopping season the most important time of year for our american made company today. paul dedrick is ceo of buffalo

games. he joins us now. i was thinking about this. they're adult games and it's fun to do these, but, you need to convince people that it's still fun to do these things, sit around the table with adults and do it. i think there's a huge market for this, because it's hard to -- >> people are still playing board games. >> yeah. >> we did a survey just after thanksgiving holiday, and 58% of the people said they played a board game over thanksgiving. >> families? >> with a family, yeah. so they're still relevant. people are still playing board games. >> not just puzzles, and not trivial pursuit, things like that. what do you make? >> we make a line of jigsaw puzzles and board games to the teen and adult market. we have about 200 titles in the puzzles, and then we have about six or eight party games. we call them party games. games that are really easy to learn. for teens, young adults, adults. they're parties out of a box. you don't have to put a lot of effort in. it's a type of product that allows people to escape from the

pressures of the world. you know, like including technology. you know, you're talking -- >> that's what i was saying. because the games that we play, mostly involved zombies and guns and things like that. >> right. >> you don't kill any zombies? >> no. they're really fun. they're traditional board games. but the content is geared towards today's consumer. they find it fun. they find it relaxing. they find it a way to kick back with their friends and family and just get away from the pressures of the world. >> what's the most -- >> our best is a party game where you basically are trying to take a subject like maybe it's favorite or flavors of ice cream and the letter will say "c." so everyone starts yelling out flavors of ice cream that starts with "c." of course someone is going to yell chocolate. but it's the last word. you have the timer, it lasts about ten seconds, whoever gets the last flavor in, they win the round. they're easy to learn. they're very popular to get away from the stress of the world.

that's our best-selling game. >> how do you explain growth? in a high-tech world where everybody is going more online, downloading games, how do you explain? >> one of the strategies we use. we sell through retail partners like walmart, target, toys "r" us. we built a domestic manufacturing ten years ago after outsourcing our products for years and years. we decided we could build this facility, be closer to our retail partners. we could service their needs within, you know, basically hours, versus weeks and months, if we were doing it overseas. so that's a big part of our growth strategy, is being close to our retail partners. we're in over 22,000 retail markets across the country. >> growing up we didn't have the video games on tv. they didn't even allow it. remember board games. sort of market toward that nostalgia of days where families used to sit around playing monopoly and chutes and ladders? >> sure. you get together with friends and family. six or eight of you, you kind of

set technology aside -- >> but are you adding technology? we just talk about qr codes. are people doing old school games but adding these little -- >> there are some games out there where they've added technology. our gamers are asking not to have that. they really want to escape from the pressures of technology, not be on the clock all the time. always in context with somebody. they want to relax. kick back, have some fun. >> have you solved the problem of never losing pieces? >> you know, that is -- we have a state-of-the-art manufacturing facility. we just invested $2 million this last quarter on our puzzle technology. so we really have a great facility. it's probably the best facility in the world. >> paul, we appreciate it. this looks like fun chronology. >> yes. >> a puzzle. >> made here, not made in china? >> right here in the states. >> great. >> okay. let's take a look at what's still to come this morning. at 8:15 eastern we've got hedgery blodget to discuss facebook. the stock's recent move. and then at 8:30 eastern boeing

chairman and ceo jim mcinerny is going to join us. and at 8:40, john mcafee live for the first time since arriving back in the u.s. and avoiding extradition to belize for a murder he says he did not commit. twins. i didn't see them coming.

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coming up, flying over the fiscal cliff.

boeing chairman and ceo jim mcnerney is going to join us to discuss our nation's debt and his business. and then, it's one of the most craziest stories out there you have ever seen. we've got john mcafee. he's going to be joining us in the 8:00 hour.

and "squawk" taking flight. >> roger. >> huh? >> request vector. over. >> what? >> boeing chairman and ceo jim mcnerney on the problems with the dreamliner and the companies plans for the fiscal cliff. >> want to tell you both good luck. we're all counting on you. >> and it's a strange tale of murder, escape, and international intrigue. john mcafee, wanted for questioning in connection with the murder of his neighbor in belize, feared for his life, escaped to guatemala, faked a heart attack, and was deported to the united states. he's going to join us live at 8:40 a.m. eastern. the third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc.

first in business worldwide. i'm joe kernen along with andrew ross sorkin, who has not been to belize. >> i've not been to belize. >> our guest host is kevin, who has been. >> i have been. >> and it's apparently difficult -- >> you've got to fly in and take a little puddle jumper out to an area. nice, though. >> the reason we're talking about this? john mcafee. >> john mcafee. >> going to be on. and we also have another huge lineup. henry blodget is going to be on to talk facebook. the lockup on about 156 million shares head by insiders expires today. i wasn't trying to put henry in the same category as john mcafee. not like a rhodes scholar. then at 8:30, the chairman and ceo of dow component boeing, jim mcnerney is going to join us to talk about, we want to talk about boeing and the dreamliner. we'll also, he does talk to the politicians about how we're going to fix this. but we really do want to talk about boeing, how the company is positioned at the end of the year. and then, as we've been alluding

to, one of the most bizarre stories of the year, we will be speaking to internet security software pioneer john mcafee. who, it says here, on the run from authorities in belize. but, he didn't get arrested here, and they actually, the authorities escorted him to his hotel room in south beach. 8:40 a.m. first, though, andrew, you have this morning's headlines? >> but i could just -- we could just talk about john mcafee probably for the rest of the hour if you like. >> and it's going to be robert frank. >> got this interview. he's going to be on set and it's going to be -- interesting thing. president obama and house speaker john boehner, they met for about an hour at the white house last night. boehner departed the white house without comment. both sides are trying to break an impasse, in budget talks to avoid the fiscal cliff. aides say the men had a frank discussion. i don't know if that's a positive. and the likes of communication, they say, remain open. although no specific details were released. the meeting came after a day of

frustration. both sides criticized each other for a lack of progress. this was house speaker boehner earlier in the day. >> republicans must solve this problem by getting the spending line down. the president wants to pretend the spending isn't the problem. that's why we don't have an agreement. >> president obama remains hopeful that a deal will get done. he told a cbs affiliate he's willing to do a lot more in cuts and spending with a little more in revenue. we'll see where it goes. united technologies expects profit to rise 13% next year, even if the economy goes over the fiscal cliff. the company now saying that growing demand for its building products, elevators and air conditioners is offsetting lower u.s. defense spending. united tech ceo says he's hopeful congress can reach a budget deal by december 31st. but cautions the company has held off on some spending due to uncertainty. let's take a quick check on markets ahead of the opening bell, in about an hour and a half. if i take a look at futures, dow jones looks like it will open up

about 25 points higher, s&p 500, about a point and a half higher. and the nasdaq will be off a little over four points. overseas in asia, check out what just closed up over there, hang sang up marginally. shanghai composite up a lot, 4.32%. and nikkei off. and take a quick swing over to europe, see what's going on there. the ftse 100 off slightly. cac off slightly. and the dax up slightly. joe? >> thanks, andrew. dallas fed president richard fisher spoke out earlier on "squawk box" about the fed's latest move. he likened the new link between interest rates and unemployment and the growing of the fed balance sheet to a hotel california situation. >> we have very frank discussions, it's civil. i argued that basically we were at risk of what i call a hotel california monetary policy, going back to the eagles' song, which is you can check out any time you want, but you can never

leave. that's what i worry about, theoretically we can check out any time we want from this program, but we practically, since we're going to have an engorged balance sheet, we may never be able to leave this position. >> fisher said that he argued against the new policy. we also asked him about the looming fiscal cliff. >> i'm begging members of congress, and the executive, to please get something done here that reassures consumers, reassures business operators, most important of all, to create the jobs in america. >> now we're going to have more from our guest host, gop strategist kevin madden. that quote that we just saw not from richard fisher but the one where the president said i want a little more revenue and i'm willing to do a lot in spending cuts. taken at face value? >> you know, he hasn't laid it out. what we've seen from geithner and others and talking to folks up on the hill is that he's basically reproposed his budget from last year that didn't get any votes. and i think there's probably a

reluctance from the republican side in the conversations that they have with their colleagues on the democrat side that they're not willing -- that the president hasn't really built the support that he's going to need up on capitol hill with democrats an what revenue should look like and what entitlement reforms should look like and some of the spending cuts. i continue to think that we're where we are today, the same way where we were two weeks ago but they're talking with a little bit more frequency. >> i sometimes wonder, and now i am doing a little postmortem, if your candidate, if governor romney had just said, you know what? i'm running on simpson-bowles. and i want to do -- whenever you ask him about simpson-bowles, i have my own plan. i sound like bush. i can't do a romney. you probably could because you look like him. but he didn't. he didn't. he had his own plan. not simpson boat and then you got into the problem with the 20% and the president was able to say about the $5 trillion tax

cut for the wealthy. should we do simpson-bowles? >> i think simpson-bowles offer a closer framework than the president's budget did. i mean that's the thing that many people are frustrated with, which is that the president appointed this commission, and then bypassed all of its recommendations and didn't do anything serious on the entitlement side or on the revenue side. >> that cures the fiscal cliff and the fiscal abyss. >> i think, look, forget about what romney said as far as what he would have done, i think what is more apparent is, the change, the volume and the tenor of the conversations in washington, d.c., the president has to be much more engaged. i think that's something that -- that hasn't happened to this point right now. he hasn't built up the political capital that he's going to need within his own caucus, in either the senate or the house. >> i want to ask you a question. >> what's that? >> because you're a host. if you anecdotally, the business leaders that i've spoken to said that there's been a marked shift in tone from the white house when they meet with them now. >> yes. >> and they're much more --

they're listening more, they're getting back to them, they're saying, what about this? there's a lot more interaction, and there's -- you were at your conference -- >> i would say -- well, let me say this, i think they're doing a much better job it sounds like in outreach. >> pretending to listen? >> but to the follow-up question, and i was with somebody you know well at lunch yesterday -- >> i'm talking the same thing. >> we were having a conversation about this, and this person was saying, great outreach, we're hearing, the follow-up is, are they listening? are they taking suggestions? no, not necessarily. >> there's a low bar. i will say that. >> i definitely decide, let's engage -- but it sounds like, this is one of the points that they made yesterday, to me was, this idea that they're engaging the business community perhaps more than they're engaging boehner and the republican party. >> that is sure. but i will say this about the president and i don't mean this as partisan criticism, sort of a political observation. he's been very good, always very

good at mastering the pageantry of it. which is making sure people know he's talking to boehner before he goes back to ohio. making sure that everybody sees the symbolism of meeting with the business community and trying to be inclusive. but he's been very good at executing it on capitol hill, and the practice of really forging the bipartisan compromises and putting the details together. and then going up to his own caucus and fighting for it. i mean that's the thing. over the last four years, if you listened, really wanted to hear people criticize the president, and his approach to capitol hill, the people who were probably most animated in their criticism, capitol hill democrats. >> right. >> i mean if you at least -- no one wants the president to turn into milton freeman with the private sector, but if you just, for his legacy, and for the growth of the economy, and growth of jobs, it really is a partnership between the white house and business and the private sector. be a really good thing. it was really not that apparent,

i don't think, and maybe he had different goals than the first administration. >> there's a fundamental difference. >> most presidents do eventually do that. >> they're saying there's a different philosophy about what gets you there. right? that's the distinction, right? >> yes, and no. but i mean, even if you do have a different way of doing it, you don't want -- you don't want to constantly be sort of making business people feel like they're the bad guys. >> right. and by the way, i think that is the big distinction. the past three weeks they don't feel that they are the bad guys in the way that they felt. >> that's right. and look, they have an south centr central -- electoral judgment. you've even seen this from some republicans -- >> maybe it's legacy, not re-election. >> and that's -- that will be interesting to see. this is going to be a really big part of any eventual legacy. i think on the republican side, which is, okay what you have is a lot of people start to talk about taxes, because they thought the election gave them the judgment that they had to listen to. but now i think you're starting to increasingly see many

republicans are seeing this not as an event. but they lost the battle, perhaps, but they're losing the battle on taxes and the way to get it back is to dig in. >> i'm watching you. i still think you might be one of romney's sons. did you change your name to -- >> i'll tell you what -- you swear you're not? >> i'm telling you, i checked -- >> i asked him to check his will and apparently i'm not in the trust fund. >> that is not a negative thing for me to call you one of his sons, by the way. >> you think they're good looking? >> i think all of them are. >> they're all very handsome men. >> and so are you. >> you know what? it's crazy, if you see us up close i actually have more gray hair. >> do you really? >> which is scary. he looks like a 35-year-old. >> what's he going to do? >> know, i think he's going to take some time, first with his family. but i think he's going to get more involved. >> not mayor? >> no, no. i think he's going to play a role with his church. i think that was one of the great things that came out of this election, was a lot of the negative stereotypes that you

heard about the lds church, that sort of changed. a lot of people are looking at it differently now. and people are more informed about it, educated about it. >> will ge in the investment business again? >> he went back on the board of marriott. >> he did? >> yeah. i think he'll be involved with business somewhere. >> more from kevin still to come. >> okay, coming up we've got 156 million facebook shares held by insiders. they're going to be released from a lockup today. will investors sell off? that's the question. or will the stock continue to climb? henry blodget is going to join us next. in the next half hour, two interviews you do not want to miss. i promise you you do not want to miss these. the first, boeing chairman ceo jim mcnerney. problems about the dreamliner, orders, and the fiscal cliff. and here it is the moment on "squawk." john mcafee on the run there authorities in belize in the connection with the murder of his neighbor, a story we've been following for weeks. we're going to talk with john mcafee live at the bottom of the

hour on "squawk box." >> monday on "squawk box," his comments on fed easing in 2010 sparked a market rally. >> the economy's not going to pick up in the next three months and the fed's going to come in with qe. everything to the near-term. >> we'll get david tepper's take on the fed's latest move on the looming fiscal cliff. it's an interview you can't afford to miss. "squawk box" starts monday. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, tdd#: 1-800-345-2550 and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-800-836-8799.

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welcome back to "squawk box." the futures now up about 23 points or so. that it will get back maybe a third of what we lost yesterday. in china today, manufacturing activity hit a 14-month high in december. that's an encouraging sign for the world's second largest economy. hsbc's preliminary monthly purchasing manager index rose 50.9 from november's 50.5. also, china story. apple's iphone is officially on sale in china starting today. that should help apple reverse a slide in its market share in that really important area.

but analysts say the key to apple's future in china is a tie-up with the telecom operator china mobile. the two have been in talks for years but haven't yet come to any agreement. and you wonder how much china, how much do they want? how much do you have to give up to get a part over there? almost everything, right? >> pretty much. all of your data, everything -- >> their way, they get your technology. do they get the lion's share of -- do they split anything down the middle? >> anyway let's talk about facebook. a major facebook lockup expiration is happening today. early employees' investors will get their first chance to sell about 156 million facebook shares since the ipo back in may. and joining us now on the "squawk" newsline, henry blodget, the ceo and editor in chief at business insider. good morning. >> good morning, thanks for having me. >> a little prognostication here. does this matter? we thought it mattered the last time, and not only didn't it matter, it tilely pushed the stock up. >> the first one of these, everyone said oh, it won't

matter, it's in the market, but peter thiel suddenly sold his whole stake and the stock tanked. the second one everyone said it's going to be huge and the stock went up sharply. the main point is we're getting through these lockups. this is the last big one. so this will very quickly cease to be a concern. >> henry, the cfo of facebook, he was in part behind the number of shares that did go out on the market. heavily criticized, including in a column that i wrote several months ago, for the way they approached this ipo. but part of the reason that they put all these shares out was because they knew these lockups were coming. how do you think about it? >> look, i think that if you use the idea it was a financing event, and adults are stepping up and deciding to buy at a particular price, facebook handled it perfectly fairly. and if going down the road over the next couple of years the stock recovers and goes higher, this will all be forgotten. if the ipo is a high water mark

forever, facebook will have made a mistake. there's no question about it. >> but how long does the honeymoon last? does it have to get back to that $38 within 12 months? do you give them two years? do you give them six months? do you say look at all the people who already lost a fortune and got out of the stock after the stock was virtually, you know, down by 50%? >> well, i think the whole shareholder base, a lot of it has really turned over, at least the folks who bought it from flip are all gone and so forth. the stock's had a great run here from the high teens. if that continues, i think people will quickly forget about it. but the big concern to me still remains the multiples, being driven by momentum now. it's not sudden valuation. >> that's what i was going to say. when you look at the price now, does this make sense to you? >> so right now it's trading at about 40, 45 times next year's earnings. the only thing i'm highly confident of is at some point facebook will trade at the 15 times earnings that google and apple are trading for. the question is when, and how big the earnings are, what investors are focused on right

now, that they have an exciting new mobile story, sponsored stories. everyone's excited about the new ad exchange. the idea is that that will reaccelerate revenue. if it does you've got momentum players who will keep playing that. but you've got more and more risk as we get out at much higher multiples. >> did you see, there was a blogger a couple days ago who wrote a very interesting piece about the likes, the number of likes that are on facebook on the time, and this is a huge part of the database that facebook is creating, people who had passed away, who still had accounts on facebook and there were still likes popping up. and people were questioning the likes and the liking system. >> they did that after they voted in the election. they actually then liked certain -- you can answer that, henry. but i heard instagram, that that was a steal now. it looked really like it was out of control, and now watching my kids and stuff, was that -- that was a pretty good move, wasn't it? >> that's right. people said this is further

confirmation that you've got a 27-year-old fool running the company. and yes, instagram has over 100 million people using it. a lot of people quitting facebook because it's no longer cool like your kids are going to instagram. it's very visual. they will begin to have advertising on it. people are looking at that as a green field that could be a huge advertising growth story. so, yes, it's looking brilliant. >> what about the instagram fight with twitter? because twitter now, if you're using twitter you can't use an instagram photo? >> yep. >> how's that going to -- >> i think it's overstated. i completely understand why instagram did that. because effectively their assets were being harvested by twitter. and people were staying at twitter. now you have to click through to the instagram site. so you can still see the stuff from twitter. so i think the actual controversy has been overplayed. >> probably end up getting more users as a result? folks that are on twitter but haven't used instagram now introduced through a new -- >> absolutely. >> a new portal. >> henry, last question on terms

of advertising and mobile, is there anybody out there that you've seen where you go, wow, they've figured it out? >> facebook is figuring it out. the mobile stories, the new ad unit that they have, that is a native unit, you consume it easily, it's not annoying on your smartphone. that will be a big multibillion dollar deal in relatively short order. search works. what doesn't work are the banners that are overlaying your smartphone and driving you crazy. >> before we let you go, totally off topic, you may not know about it but i'll ask anyway. yahoo! there's a report on all things "d" that they're looking at sumly. remember the 16-year-old kid he came in and now there's a rumor that marissa maier may want to buy that company. what do you know? >> she is incredibly dedicated to engineering and product and he's got a very cool product at 17 years old. 500,000 people have downloaded it, talk of silicon valley. another very aggressive move by

marissa meyer. >> henry we're going to leave it there. appreciate your time this morning. >> thank you for having me. >> coming up the government's read on consumer prices in the month of november. the cpi at 8:30 a.m. and two big interviews still to come, boeing chairman and ceo jim mcnerney. we're going to talk to him about the dreamline enand how his company is planning if there is a move over the fiscal cliff without a resolution. and then john mcafee will join us live. he's been evading belize authorities for weeks. we'll get his side of the story, in just a couple of minutes. icae in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

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welcome back to "squawk box" this morning. the "financial times" now announcing its person of the year. drumroll please. the honor going to, european central bank chief mario draghi. for his efforts to deal with the euro financial crisis, his do whatever it takes to preserve the euro statement earlier this year seen as a turning point in the crisis. we also have another piece of news, the authorities in moscow approved construction of a new theme park by nbc universal that could open by 2018. the park is a joint venture. expected to cost about $2.8 billion. the plan includes hotels, a fitness cinder and a cinema. of course nbc universal is the parent company of this very network. coming up we have a lot to talk about. the government's latest read on

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welcome back to "squawk box." we're just seconds away from cpi numbers for november. we've also got a number of things on the plate this morning. we've got jim mcnerney from boeing. got to talk to him about fiscal cliff issues. he is a simpson-bowles guy? because, a lot of defense cuts in that. i wonder what that would mean for boeing. >> probably not a sequestration guy. >> exactly. and then the second piece at 8:45 or 8:40, we have john mcafee on the run, but not on the run from "squawk box." in any event, rick santelli is now standing by at the cme in chicago, we've got steve liesman in the studio. rick, you have the numbers. >> survey says november cpi headline, up 0.1%. if we look at the year over year number it's up 1.8%. up 1.8%. i'm sorry, that actually is excluding energy up 0.1%. don't -- hey, tony. sorry, guys, they chopped off my last headline.

so i don't see the actual. now look at year over year 1.8. if you look at year over year core it's 1.9. do you see what the headline read is on cpi? down what? looks like we're down. >> minus 0.3. >> down 0.3. i apologize. sometimes these things scroll so fast. so very similar to yesterday's cousin the ppi, we don't see a whole lot of pricing pressure right now. i remember some of the e-mails i was getting when we saw import prices which were all very weak, as well. you know, is this an issue of demand? is this an extent of fiscal cliff? is this, you know, going to be something we're going to be in tune with, as energy prices have mod rated? i can't tell you that. but what i can tell you is right now inflation doesn't seem to be a huge concern outside of the core. back to you. >> okay. thanks, rick. for more on the numbers, mr. liesman has been sorting

through -- >> i'm having the same trouble rick is having with the data. i don't know how he does it every day when i gets that data as it scrolls across. one interesting tidbit is that real earnings for private workers was actually up in november. up 0.5%. the consensus was 0.1%. and that followed 5.5%. these are inflation adjusted earnings. we get that with the cpi. overall, cpi remains tame i think as far as the federal reserve is concerned. you'll note that the federal reserve uses the ece which is a different indicator. rents are a smaller percentage in the pce so rents have gone up, as essentially the rental market has really taken off in the wake of the housing crisis. so that's something the fed is a little less interested in. and the labor department also saying that superstorm sandy -- >> impact of that. >> on data collection for the month of november. >> interesting. >> one thing we have seen in the wake of the hurricane is a rise in prices.

but apparently not happening this time around. . >> mr. liesman, thank you. mr. santelli, thank you. >> thank you. >> all right. our next guest is a member of the fix the debt campaign and while he's trying to get washington to avoid the fiscal cliff, he's also running aerospace giant boeing and joining us now from chicago is jim mcnerney, boeing chairman and ceo. mr. mcnerney. great to see you. earlier we said we do want you to fix the fiscal cliff, obviously, if you have time. but we also want you to make great airplanes and make sure you've got those totally perfect before you really start. you know, we can't put everything on you at this point. >> are you asking about the 787, joe? >> no. just in general, we want the safest planes, but you know what? i do have to ask you about that eventually with the generator and the qatar stuff. but just in general we don't expect you to fix the nation's

ills. just make the, you know, continue to make the greatest planes in the world. but this generator thing, is it -- it happened what, twice or something? or is that a -- a fault make at the generator if that does happen twice? >> well, we're investigating it right now, joe. i mean, i think we're having what we would consider the normal number of squawks on a new airplane consistent with other new airplanes we've introduced. this is an issue we're chasing down. we regret the impact on our customers, obviously. but, i would put this overall in the normal introductory squawk kind of level. >> yeah. >> we're working through it. >> i mean, we have mentioned time and time and again, and we always do it when we worry about verbalizing it, but the definite record over the last, i don't know how many years it's been, for not just boeing jets but the airline industry, it's beyond belief almost. and i know you were a gechlt guy with sic sigma but it's like 1 out of 10 million or something

for takeoffs and landings? >> yeah, yeah, it's been pretty good combination of the technology, improved training, procedures at the airlines. you always have your fingers crossed but we are feeling good about the record. >> let's talk a little bit about the fiscal cliff and not just how you think we should fix it but whether you're such a long-term business. i would imagine that even if some ceos have changed plans for 2013, nothing at boeing has changed yet, because of these negotiations. has it? >> i would say that we're a little bit of an outlier on that case. if you surveyed all the members of the brt, for example, i would say 90% of them would say their investment decisions and employment decisions will be impacted by the fiscal cliff. and eventually, ours will, too. but we're in a longer cycle environment where it will take a little longer. there's some latency in the lag. but we had a show of hands the other day on this very question.

and 90% of the hands went up. negative impact on investment and employment, if you go over the fiscal cliff. i mean, it is a huge event that is to be avoided, and this is why the business community is trying to weigh in prague matically here. and our paint of view here is all things on the table. fiscally responsible solution. yeah there are going to be some revenues involved but there needs to be multiples of that in entitlement cuts. and so i've taken enough flak on both the right and the left in this equation to know that i'm in the right place. >> jim, when you think about, i'm curious, are you a supporter of simpson-bowles? i ask because i believe that plan calls for $1.4 trillion in defense cut spending which i have to imagine would impact your company. >> yes, both sequestration and simpson-bowles would be negative from where we are today.

but, again, i'm not sitting here in front of you on this issue as the leader of the world's largest aerospace company. i'm sitting worried about the u.s. economy, worried about our political ability to function and the impact on our country if we don't. it's a big deal. we'll deal with the defense cuts as they come. more important is the environment that every company in this country has to operate in. and it is scary if we don't deal with it. >> and jim, let me ask you a question, i hear what you're saying and i hear you saying this publicly on the air and we're thrilled to have you talking about this, you also have teams lobbyists in washington. what are they saying to legislators and lawmakers right now? well, i -- wearing their boeing hat, of course, they're advocating for boeing solutions to some of our defense and aerospace problems. as jamie pointed out to you the other day, the right to position

does extend itself even to big companies. >> i'm glad you saw that. that was andrew. i said it's not even in like the eighth amendment. i think it's in like the first amendment. and unions have some pretty good lobbyists, too, don't they? >> yeah, they got tons of them. and we all get to have voice. we are in a democracy. but, i would also say, and i would also say to andrew's question, that you know, we're in the thick of this whole fiscal cliff discussion. i mean, because it does impact every company. it is as important as any single program or advocacy that boeing has. far more important. >> so you would urge both sides to do simpson-bowles, then? would you urge that because the fiscal cliff, we get over that. if we just delayed things or did some patchwork so that we get through that period, everything else is still just the way it was before that.

>> we're not advocating for a specific solution. we're advocating for a fiscally responsible solution that recognizes the political reality that revenues are going to be part of it. but costs need to be a multiple of that. and it's -- it is something we've got to get done and whether the shape is simpson-bowles, whether the shape is something else, there has to be a fiscally responsible element to it. our politicians just need to spend time talking to each other. i mean i think i was heartened last night that the president and speaker boehner spent some quality time together. i'm also heartened by the fact that not a lot came out of it. >> have you noticed this shift in tone with your meetings with administration officials in terms of their attitude toward business? >> i would say that the engagement, particularly as it relates to this issue, has gone up a notch. i think the president has gone

out of his way to spend time with us. quality time with us. as have -- has the republican leadership. and so i think the proof is in the pudding, though. i mean, at the end of the day, there's lots of discussions we have with the administration, and with the leadership. but there is one huge elephant in the room. and that is this fiscal cliff issue. all the other ones, when you add them all up, total to about a third of what that is. >> well just real quick, what about moving past the fiscal cliff? i think because a lot of people are doing that because there's short-term, immediate pressure on it. what about the longer-term solutions that we need? and fundamental tax reform, as it relates to our u.s. competitiveness around the globe? >> well, i think those are big issues. and i hope that a fiscal cliff resolution does not impede our ability to get to tax reform. because i think fax reform really is agreed to on a bipartisan basis and should flow

naturally from what comes of these current discussions. i think that can get done. the fundamental issue, though, is that we've got to restrain long-term spending in this country. we cannot afford where we're going. i get the argument that some revenues have to be part of that. but i think confidence can be restored both in the business community and in the political environment if we get to some kind of agreement over the next couple of weeks. and i think confidence has a chance to snow ball from there. >> jim mcnirnny, thank you very much for your time today. it's a story that gets stranger by the day. internet security pioneer john mcafee wanted in connection with the murder of a neighbor in belize. evades authorities, ends up in south beach. he's going to join us live right after the break. male announcer ] you are a business pro. monarch of marketing analysis. with the ability to improve roi through seo all by cob.

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welcome back to "squawk box" this morning. robert frank joins us on set for a very special interview. we've been talking about it all morning. robert? >> that's probably a little strange, too. you know, the global game of hide and seek with john mcafee has riveted the country for weeks. he's wanted for questioning for a murder in belize. he is now in miami, we think.

he joins us first on cnbc to tell us where this bizarre story goes next. john, thanks so much for joining us. you are in miami, aren't you? >> i was just playing around. yes, i am in miami. >> okay. now, we -- i speak with the belize police yesterday and they said this investigation is ongoing, they could charge you with this murder if they do they have an extradition treaty with the u.s. where you would have to go back to belize to answer these charges. what will you do if you are charged with this murder and the u.s. forces you to go back to belize? will you disappear? will you go to answer those charges? >> i would certainly go to answer those charges. but there will be no charges. this is like every other charge they have leveled against me since the 30th of april of this year. the first one being running a meth lab. then running an antibiotics lab without a license. which is a serious crime in the third world. and on and on and on. this is about the eleventh attempt to charge me with something. i will not be charged with this.

i will certainly answer any questions and i've offered to answer them in a neutral country. if i am, i'm certainly going to answer them. but it will not happen. >> so if you are asked to answer questions would you do it with u.s. law enforcement there? and did you think that will satisfy the belize police? and is there any plans for you to answer those questions, either by phone or video, with u.s. police? >> i've offered it many times. in fact, i've said in any neutral country i will meet and answer any questions you want. i'm certainly not going to turn myself in to the authorities who've been trying to lay hands on me for months now. so, no. but i will not go back to belize to do it. if i'm charged, of course, we'll go through the process. they're not going to charge me. let me be clear. i had nothing to do with the murder of gregory faull. the authorities know that. >> and i think our viewers just want to understand it. if you had nothing to do with it, why go into hiding for the past month? >> i've actually been in hiding for the past 2 1/2 months. the gregory faull occurred in

the middle of that. it started on the 30th of april when they raided my property in orange walk. they 134i9ed me to a kind of torture where they put my hands behind my back, handcuffed me and kept me there for 14 hours. you should try this sometime. after about the sixth hour that the agony becomes unbearable. they didn't charge me, let me go. and the next day came back and said, now would you donate the $2 million? this has been my ongoing struggle. instead of donating them the money i went to the international press and told my story. when that happened they began in earnest to go after me. finally, i, you know, i gave up, and escaped and here i am. >> john, there have been those that have said that you love elaborate hoaxes. just a week ago you staged your own heart attack, from what i understand. >> that is correct. >> you have sold a book and perhaps a movie project related to what's happened over the past couple of months. this -- to those who are

watching this saying, this doesn't make sense, this whole thing is crazy, what do you say? >> it certainly feels crazy to me. and i do love hoaxes and i love elaborate hoaxes. but not ones that involve my detention in gouatemalan jails, the shooting of my dogs, the harm to people. this is not a hoax. if it is, it's the worst hoax in the world. how could it be a hoax? i was minding my own business in april, when 42 armed soldiers stormed my property, shot my dog in front of my eyes, and just to show me that they were serious, destroyed a half a million dollars worth of property. tortured me in the sun by keeping my hands handcuffed behind my back with no relief for 14 hours. again i suggest you try this, people. take me to a jail, release me with no charges. and then from that point on they have been harassing me. if it's a hoch, i certainly did not invent it, sir. >> so, john, as a hoaxer, we don't -- that makes it hard for us to know whether you're just

playing us or whether you're eccentric or crazy or whatever. what -- >> sir, let me -- >> what about the bath salt stuff, then i heard you hadn't done any drugs in 30 years. you are known, just google it, a bath salts enthusiast. is this kind of part of the hoax? >> well i did a hoax on bath salts once, absolutely. but let's -- okay. bath salts are used by people that don't have a lot of money in order to get high in a way that makes you want to eat people's faces. you know, if i decided to start doing drugs again, i have the resources to do good drugs. absolutely. i did a hoax on a website called blue light where a drug called mtpb-10. eleven years ago there was a hoax by a couple of british people who claim to have discovered this drug that had irrational properties, got you high, made you sexual, increased your intelligence, and then it disappeared. it was not real. so i made a hoax to pretend that i in the jungle of belize had

discovered the formula for it. it was a fun joke. it went on for months, and got to be the largest in blue line. that hurt no one. i've been jailed. i have been, my dogs have been killed. and i didn't start this. how would i get a hoax to have 42 soldiers come and destroy my property, arrest me and torture me? get real, sir. that cannot be a joke that i created. >> john, one of the reasons that i think people are fascinated by your story is your wealth and more importantly your former wealth. you started mcafeeassociates, you were at one point worth over $100 billion. reports say you were worth around $4 million. now we hear you're worth $20 million, and all of that money, or most of it is in belize. what are you worth and where is your money right now? >> you know, my accountant may know what i'm worth. i have not asked him recently. i'm 67 years old. i eat well and have enough money for food. and clothes. i really don't have a clue, sir.

>> just a ballpark. >> you know, less than $5 million, certainly. >> and where is that money, or is it in investments, or is it in property? >> well, i believe it's in the pockets of the politicians in belize now. i think they're in the process of doing an acquisition of my resources like they acquired the lord ashcroft telephone company. they just took it away from him. and i think that's going to happen to me. >> john, do you consider yourself right now to be on the run, if you will? >> do i look like i'm on the run? i'm sitting comfortably with a cup of coffee. i'm not on the run. i stopped being on the run as soon as i arrived in miami. i was met by a number of police officers. i had a moment hesitation. but they were all smiling and said, sir, we are here to help you, come with us. we will take you to safety. yes, sir. >> the authorities in belize, there was prior history with your neighbor, i guess. not everybody knows what that

was. how long had there been some, i don't know, animosity or bad blood, and is that why people think maybe -- i mean, he was murdered, right? it happened somehow. and if there was some bad blood, maybe that's how all this got misconstrued. >> i love how the press sort of creates the reality and then feeds on that reality until there's a history of bad blood. i've spoken 50 words to that man in five years. as a neighbor, i mean, you should see the neighborhood. there are two vacant lots between us. hundreds of yards down the beach. i barely saw him. the last time i saw the man was months ago. he did not like my dogs. and he liked many of the residents that drank heavily. i don't associate with people who drink. i don't allow them in my house. i don't go to houses of people who drink. maybe that's why the neighborhood didn't know much about me. i didn't have a history with him. he complained about my dogs. but every neighbor complained

about my dogs. i complained about my dogs. they kept me awake, too. i was trying to fix the problem. if i had to take action against everybody who complained about my dogs, there would be no people left in san pedro. so we had no history. sir. >> john, i understand you're trying to get your girlfriend, samantha, who's 20 years old and her friend amy, who i guess used to be a girlfriend but tried to kill you at one point, you're trying to get them back to america. can you explain this a little bit and why they're important to what you're doing in the u.s. right now? >> i did used to live with amy. and i currently live with samantha. amy escaped from belize the day before yesterday on foot. she met up with samantha, and they are in hiding in guatemala, legally. they have -- their passports are stamped. so the guatemalan authority has no reason to ex tra drit them.

when i got into guatemala, i was arrested at 10:00 at night. at 4:00 in the morning, a press release was issued saying i was going to be exported back to belize at 8:00 a.m. it was only the action of my attorney at 5:00 a.m. who brought a judge in to stay that move until we could file an appeal that kept me from going back. so you know that they can kidnap a couple of young girls and bring them back. if that happens, i wouldn't have any choice, i would have to go back and turn myself in to prevent them from being tortured. i know it sounds mad. but this happens. i'm sorry, people get tortured in belize. this happens. i'm sorry. it happens in mexico, and no one says anything. it happens in honduras, but you say belize, and they say, you're paranoid. no, i'm not. >> there are reports and pictures of you on the internet often, holding weapons, holding guns. reports of you shooting your guns inside your home, on your property regularly.

are those reports accurate? it's certainly accurate that i had lots of guns, but they were in the hands of my security guards. i live in a country, sir, that has the highest murder rate in the world. check it out on the internet. it's populated by numerous gangs. the gangs suppression unit was created ostensibly to control gangs. so of course i have guns. i have security guards. the reason i had ten dogs is they bark if someone tries to break in. i did. this shooting, that's complete nonsense. there was shooting the night my dogs were poisoned. that's complete nonsense. this is the press picking something up. this is like cnn. for example, head of the gsu put out a press report the day the body was discovered before the

body was discovered saying, john mcafee is the prime suspect. cnn was the only one that published it because they didn't check it out. the san pedro police who were in charge, they said, no, we don't have a clue yet. we haven't even started an investigation. the gsu is not involved. once cnn reported it, everybody reported it. so now you're reporting somebody else's news. if i don't put a stop to it here and now with this one question, then someone else will report it again. >> john, just a quick question. people know you as an entrepreneur. you're 67, you have about $5 million left. what will you do now? will you start another business? will you try to get those assets back to the stusmt? what are you going to do to make a living, or to get your fortune back in the coming months? >> making money is easy. it is. the difficult thing in life is not making it, it's keeping it. any idiot can make money. keeping money, very few can do.

i had five businesses in belize. i owned the -- a water taxi business, a water sports thing for tourists. i own a bar in carmelitya that i've never been in, because i don't drink. i'll do something. i'll shine shoes. i'm 67 and i'm still breathing. >> john, thank you very much for joining us. please stay with us in the coming months and let us know what you're up to. >> thank you, sir. >> coming up, we've got stocks to watch ahead. the opening bell will be back in a moment.ogies allow natural gs to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. can i still ship a gift in time for christmas?

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